Suzlon gets Rs 1000 crore order

Suzlon Energy (Tianjin) Limited (SETL), the Chinese subsidiary of the Pune based wind energy equipment manufacturer Suzlon Energy Limited, has secured orders totaling nearly 200 Mw of capacity for wind farm projects in China, worth over Rs1000 crore.

The first order from Ao Lu Jia New Energy Development, a Sino-Norwegian joint venture and partially owned by Norway’s NBT AS, is to deliver 148.5 Mw of wind turbine capacity through 99 units of 1.5 Mw turbines for use in three wind farms. NBT AS plans to develop 588 Mw of capacity by the end of 2010 in Jilin, Heilongjiang, and Inner Mongolia provinces.

Deliveries for the first wind farm are scheduled for shipment during the second quarter of 2008-09, said a Suzlon press release.

Another order from Beifang Longyuan (North Union), part of China’s North Union Group which develops power projects in Inner Mongolia, is to supply 50 Mw of wind turbine capacity through 40 units of 1.25 Mw turbine capacity.

China is an extremely important market for Suzlon. With our integrated manufacturing facility in Tianjin, Suzlon is poised to be a key player in this rapidly growing market," said Paulo Fernando Soares, chief executive officer of SETL.

China the second largest wind energy market with nearly 17 per cent of the global market, behind the United States. China’s wind energy market grew at a rate of 127 per cent in 2006-07 and with a three-year-average of 97 per cent. It added 3,287 Mw in wind capacity in 2007, a major increase over 2006 installations of 1,334 Mw, taking the cumulative installed capacity for the market to 5,875 Mw, said the release.

The Chinese wind energy market is expected to install another 36,500 Mw projected between 2008 and 2012.

Suzlon is ranked as the world’s fifth leading wind turbine manufacturer with over 10.5 per cent of global market share in 2007. It has a combined manufacturing base of 2,700 mw of annual capacity, and is undertaking an expansion program to expand its base to 5,700 Mw of capacity in 2008-09.

Infosys receives contract from Conseco

Infosys Technologies has announced that New York Stock Exchange (NYSE) listed Conseco Inc has selected Infosys for a five-year contract to provide development and maintenance services to its key business applications.

Conseco is a leading insurance provider focused on offering financial security for the life, health and retirement needs of middle-market and senior Americans, is partnering with Infosys to jointly support its extensive business applications.

Conseco will be able to leverage Infosys' capabilities and best practices in applications management to gain operational efficiencies and enhance business value.

Under the terms of the partnership, Infosys will be supporting several mission-critical IT systems that power Conseco's business — including new business, policy administration, claims, audit management, marketing, and agent compensation.

By centralising the support, maintenance and development of these applications with Infosys, Conseco will be able to navigate business cycles and scale its applications and IT capabilities to meet business demands.

Sonata Software net profit for FY08 up 22%

Sonata Software has posted a consolidated net profit of Rs 58.52 crore for the year ended March 31, 2007, up 22 per cent from Rs 48.03 crore last year.

The software company's consolidated revenue for the year ended March 31, 2008 is Rs 1,428.37 crore, up 59 per cent from Rs 897.73 crore last year.

The board of directors of the company have also recommended a final dividend of 60 per cent, which along with the interim dividend of 50 per cent, brings the total dividend to 110 per cent.

Wipro Q4 net up 3% YoY to Rs 880cr

Highlights for the quarter ended March 31, 2008

* Wipro revenue increased 32% YoY to Rs 5,700 crore

* Net profit increased 3% YoY to Rs 880 crore. Adjusting for one-time tax reversals in Q4FY07, the YoY profit after tax (PAT) growth will be 11.3%

* Revenue of Wipro's global IT business in rupee terms stood at Rs 3,833 crore - a YoY increase of 26%

* During the quarter, Wipro IT business won three multi-year multi-million dollar deals

* Global IT services & products added 29 new clients in the quarter

* India, Middle East & Asia Pac business recorded 41% YoY growth in revenues to Rs 1,096 crore

* Wipro Consumer Care and Lighting business revenue grew 111% YoY and PBIT grew 136% YoY

Highlights for the year-ended March 31, 2008

* Wipro revenue increased 33% to Rs 19,957 crore

* PAT grew 12% to Rs 3,283 crore

* Revenue of combined IT businesses was $4.3 billion - a 43% YoY growth

* Revenue of Wipro's Global IT business in dollar terms was $3.39 billion - a YoY growth of 38%. In rupee terms,revenue stood at Rs 13,642 crores - a YoY growth of 23%

* Technology business in Global IT services segment crossed a landmark of $1 billion (around Rs 4,000 crore) of annual revenue and business from the Americas and Europe crossed $2 billion and $1 billion, respectively. Revenue from India, Middle East and Asia Pacific business grew by 51% to Rs 3,746 crore.

* Wipro Consumer Care and Lighting business, including acquisition of Unza, increased revenue 86% YoY

* The board recommended a final cash dividend of Rs 4 per share/ADS. This, added with an interim dividend of Rs 2 per share, will take the total dividend to Rs 6 per share

Leela Group to invest $500 mn in next 3 yrs

Hospitality major Leela Group will invest $500 million (around Rs 2,000 crore) in the next three years for developing new luxury properties and upgrading the existing hotels in the country.

The group, which currently operates four luxury hotels, is coming up with six new properties in Gurgaon, Delhi, Udaipur, Chennai, Hyderabad and Pune.

Besides expanding presence in India, the Group is looking at strengthening the Leela brand globally as well.
"The idea is to build a stronger Leela brand in India as well as global markets. The focus right now in the country is to successfully launch the upcoming projects," Hotel Leela Ventures Limited President Onno Poortier told PTI.

He said that the group is intensifying marketing and public relations operations in key international markets like the US, the UK and European nations.

In next five years, the group is looking at increasing the number of rooms to 2,600 from the current 1,100. Hotel Leela Ventures owns and operates the Leela Palaces, Hotels and Resorts in Mumbai, Bangalore, Goa and Kovalam in Kerela.

PFC Q4 net dips 19% at Rs 297 crore

Power Finance Corporation (PFC) on Wednesday announced a net profit of Rs 297.32 crore for the quarter ended March 31, 2008, a 19.90 per cent decline over the corresponding quarter a year ago.

The company had a stand-alone net profit of Rs 371.22 crore for the fourth quarter ended March 31, 2007, the power sector financing company said in a filing to the Bombay Stock Exchange. The total income of the company increased to Rs 1,366.73 crore in t he latest quarter from Rs 1,238.27 crore in the year ago period. The consolidated net profit of the company was up 22.56 per cent at Rs 1,208.67 crore for the year ended March 31, as compared to Rs 986.13 crore a year ago.

For the year ended March 31, total income of the group rose to Rs 5,039.92 crore from Rs 3,927.65 crore last year. Shares of the company were trading at Rs 163.40, down 0.18 per cent on the BSE in afternoon trade.

KEC bags Rs 155-cr contract from Power Grid Corp

Power equipment maker KEC International said on Tuesday that it has bagged two contracts worth Rs 155 crore from Power Grid Corporation of India for construction related works.

The company has bagged two separate contracts by Power Grid Corporation Ltd for supply and construction of 400 KV Double Circuit Edamon - Muvattupuzha Transmission line in Kerala, the company said in a filing to the Bombay Stock Exchange.

The total value of both the contracts is Rs 155.24 crore. The line is associated with Grid Strengthening Scheme for Kerala I & II of Powergrid Network, the company added. The scope of the order includes supply of towers, line materials, erection and comm issioning. The total length of both the lines is 150 kms and the project is to be completed by March 2010.

Shares of the company were trading at Rs 591.20, down 0.97 per cent on the BSE in afternoon trade.

L&T wins Rs 2,000cr Bombay Dyeing order

Larsen & Toubro's Construction Division has recently secured a major order from Bombay Dyeing for Rs 2,000 crore for developments at the Textile Mills & Spring Mills complexes at Worli and Wadala regions of Mumbai, respectively.

According to a release issued by the company to the BSE today, the turnkey construction project involves construction of mixed-use developments of approximately 4 million sq ft at the Textile Mills at Worli and 5 million sq ft at the Spring mills development at Wadala to be completed in the next 46 months by the end of December 2011.

AstraZeneca settles patent deal with Ranbaxy

European multinational AstraZeneca today announced an out-of-court settlement with Ranbaxy on a pending patent infringement litigation on its heartburn medicine esomeprazole. Sold under the brand name Nexium, esomeprazole is the second largest selling drug in USA with total annual market sales of $5.5 billion. The agreement will permit Ranbaxy to commence exclusive sales of a low-cost version of esomeorazole for 180 days from May 27, 2014, the date on which AstraZeneca's key patent on Nexium expires.

The deal, which could bring in revenues worth $1.25 million to $1.5 million for Ranbaxy over a period of six years, allows Ranbaxy to supply raw materials (bulk drugs) for the manufacture of Nexium to AstraZeneca from May 2009 and manufacture a portion of AstraZeneca's US supply of Nexium from May 2010. The firms have also entered into agreements designating Ranbaxy as the US distributor for authorised generic versions of Plendil (felodipine) and 40mg Prilosec (omeprazole).

In return, Ranbaxy has acknowledged that all six patents on Nexium asserted by AstraZeneca in the patent litigation are valid and enforceable. AstraZeneca has stated that Nexium have expiration dates that range from 2014 through 2019.

"The agreement has provided certainty to the launch of our generic version of Nexium in the US market. This is the second out-of-court settlement for Ranbaxy in 2008 and the fifth such settlement in last two years," Malvinder Mohan Singh, CEO and Managing Director, Ranbaxy said.

Ranbaxy and AstraZeneca have filed a Consent Judgment with the US District Court for the District of New Jersey reflecting the terms of the settlement agreement.

Though the litigation with Ranbaxy has been settled, AstraZeneca will continue Nexium patent infringement litigations against other generic players Teva/IVAX and Dr Reddy's Laboratories.

Ranbaxy had on February 7, 2008 said that it received tentative approval from the US Food and Drug Administration (USFDA) for marketing esomeprazole magnesium delayed-release capsules, 20 mg (base) and 40 mg (base). The agreement settles a three year old the patent infringement litigation filed by AstraZeneca following Ranbaxy's submission to the USFDA for marketing approval of a low cost version of Nexium.

Ranbaxy stock prices at BSE rose 8.62 per cent or Rs 38.25 to close at Rs 481.8 today.

Zee Entertainment Q4 profit falls 2.72%

Zee Entertainment Enterprises’ net profit dropped 2.72 per cent to Rs 79.46 crore for the quarter ended March 31, 2008, against Rs 81.68 crore during same quarter of previous year. Total Income has increased from Rs 216.56 crore for the quarter ended March 31, 2007, to Rs 341.34 crore for the quarter ended March 31, 2008.

For the year ended March 31, 2008, Zee posted a net profit of Rs 294.92 crore as against Rs 166.21 crore in the corresponsing period last year. During the period, the total Income has increased to Rs 1,139.98 crore from Rs 929.13 crore in FY07.

The company's consolidated net profit stands at Rs 104.42 crore for the quarter ended March 31, 2008, as compared to Rs 69.92 crore for the corresponsing quarter last year. Total revenue rose from Rs 402.05 crore to Rs 569.48 crore for the quarter ended March 31, 2008.

Zee's consolidated net profit for the year ended March 31, 2008, is Rs 396.25 crore as compared to Rs 243.33 crore for the year ended March 31, 2007. Total revenue has increased from Rs 1,521.16 crore in FY07 to Rs 1,945.38 crore in FY08.

Whirlpool to invest Rs 200 cr

Home appliances maker Whirlpool of India Ltd today said it will invest up to Rs 200 crore in product development by 2010, while the company is certain to break-even when it announces the results of 2007-08.

"We expect to break-even in 2007-08 results. This will be a record turnover. The results will be declared very soon," Whirlpool of India Ltd vice-president (marketing) Shantanu Das Gupta told reporters here.

The company in the last calender year grew by 20 per cent and made a net profit of Rs 15 crore in the nine months ended December 31, 2007, he added. In FY07, Whirlpool had recorded a net loss of Rs 5.32 crore against the total income of Rs 1,496.78 crore.

Having seen a turnaround, the company expects to become a leading home appliances maker in the country by 2010.

"To make the company No 1, we will invest $40-50 million in product development by 2010. This will be in addition to brand positioning, marketing and investments in the plants," Gupta said.

In advertising, the company would invest Rs 70-80 crore during the current fiscal, he said, adding "the advertising budget of the company usually grows 10 per cent each year".

The company today unveiled a number of new products across five categories -- refrigerators, washing machines, air conditioners, microwave oven and water purifiers -- priced in the range of Rs 8,200-32,000.

With the launch of new products, the company aims to capture 25 per cent market share in the refrigerator category, 20 per cent in washing machine and 10 per cent each in microwave oven, air conditioner and water purifier categories.

Ceat plans Rs 1,000cr expansion

Ceat, India's fourth largest tyre maker by revenue, will invest Rs 1,000 crore in the next two-three years for expanding capacity, increasing focus on R&D, market expansion and improving customer interface.

The company today unveiled a new logo, which is the first-ever change of its kind for Ceat since inception in 1958.

Paras Chowdhary, CEO, Ceat, said: "The shift to a new logo and a new look symbolises the strategic transformation at Ceat. The overall design accurately represents the company's vision of leading the industry in delivering best-in class products, innovation and services to consumers."

The company will be setting up two greenfield facilities for around Rs 900 crore. While one plant will be a dedicated radial truck and car facility, the other unit will be for making speciality tyres and off-the road tyres (OTR).

The company has applied to the Maharashtra government for land to set up the first unit in Ambernath, which will also house its R&D facilities. The company is in final round of talks to set up the second plant in Gujarat, Tamil Nadu or Karnataka.

The company is also in talks with international tyre majors for sourcing technology used in manufacturing radial tyres. An announcement to this effect is expected in the next two-three months.

L&T, TIDCO to build shipyard near Chennai

Larsen & Toubro (L&T) and Tamil Nadu Industrial Development Corporation (TIDCO) signed a joint venture agreement to set up an integrated shipyard complex and port facility near Chennai. The partners will invest an estimated Rs 3,000 crore in the new facility, which will come up at Kattupalli village near Ennore in Tiruvallur district of Tamil Nadu.

The JV agreement was signed in Chennai today in the presence of Tamil Nadu Chief Minister M Karunanidhi and L&T chairman and managing director A M Naik.

Later, in a press release, L&T said the feasibility report for the project has been completed, and necessary environmental studies are under progress. Construction is likely to start by the end of 2008, and the project will be completed in 24 months, the release added.

The shipyard complex will build commercial ships like very large cargo carriers (VLCCs), specialised cargo ships for liquid and gas transportation and cruise vessels. It will also have the capability to build defence vessels, offshore platforms and floating production-cum-storage facilities for the oil and gas sector.

The shipyard will also have facilities for refitting and re-engineering of commercial and defence vessels, and heavy engineering fabrication and components production for ship building purposes.

The shipyard complex will promote several ancillary units for manufacture of components and spares for this shipyard, and for exports. When it becomes operational, the shipyard will become a nucleus for the heavy engineering industry (for fabrication and component manufacturing), the release added.

Infosys Q4 net up 9.2%, FY08 PAT up 21%

* To hire 25,000 employees in FY09; factors 19-21% revenue growth

* Sitting on $2bn cash; 15 big deals in the pipeline

* 11-13% hike in offshore salaries; 4-5% hike in onsite salaries - 2.3% impact in Q1

* Lost Rs 2,000cr revenue and Rs 1,000 crore profit due to rupee appreciation in FY08

* Hedging: $760mn; $7mn mark-to-market loss due to hedging

* Reducing onsite exposure by 1%

* Assumes flat margins for Q1FY09 ending June 30, 2008

* Pricing assumed to be stable given current conditions; increased by 6% YoY

* Closed four deals in Q4; one large deal around $200-300mn

* Clients: 40; Net hiring: 2,586; Total hiring in FY08: 33,177; Total employees: 91,187

* Dividend: Rs 7.25 per share + a special dividend of Rs 20 per share for FY08

As it guided the markets to a $5 billion revenue in financial year 2008-09, the markets reacted positively to Indian IT services provider Infosys Technologies, which posted a "market expected" result for the quarter ended March 31, 2008.

The results were no surprise since the rupee had depreciated against the dollar by around 1%. Over 60% of Infosys' revenues still come from the US. The management, however, admitted that the slowdown in the US was a concern.

The slowdown in its revenue growth, it said, was a bigger concern that the rupee appreciation against the dollar. It also sees a "delay in decision-making" when it comes to deals, but "clients are looking to increase their offshore budgets". It added, though, that while it was looking at medium- to long-term growth, the next two quarters would bring in more clarity.

Guidance for financial year 2008-09

* Income expected between Rs 19,894-20,214 crore; YoY growth of 19.2%-21.1%

* EPS to be around Rs 92.32- 93.92; YoY growth of 16.3%-18.3%

Infosys became the 10th Indian company (excluding banks and financial institutions) to become $1 billion net profit company. The other companies are ONGC, Reliance Industries, Indian Oil, NTPC, Sail, Hindustan Zinc, Tata Steel, Bharti Airtel and TCS (based on nine-months annualised).

Infosys is sitting on a pile of cash. Its cash, bank balance and deposits with financial institutions and corporate bodies increased from Rs 6,129 crore to Rs 8,396 crore. It has bank balance of Rs 6,950 crore (Rs 5,834 crore) while deposits with FIs and corporate body is at Rs 1,446 crore (Rs 295 crore).

The share of salaries and wages to total expenditure has gone up from 66.59% in Q3FY08 to 67.55% in Q4FY08. The share of S&G in total expenditure declined from 19.24% to 18.99%.

Cement export ban not to contain inflation

Even as the government has notified the ban on cement exports with effect from Friday, steel producers today said the ban will not be effective in containing the price rise, given the fact that cement exports account for only 3 per cent of domestic production. Industry added the move would deter it from enhancing capacity.

"Exports of cement constitute only 3 per cent of production and 90 per cent of the exports are from companies located around the Gujarat coastal area. Most of these companies are small and mainly export to South Africa and Sri Lanka, as is obvious from their location and country focus. Therefore, the steps taken by the government on banning cement exports would not be effective to contain the price rise," a Confederation of Indian Industry release said.

CII called on the government to consider reducing the excise duty of cement, a move that it said would help in controlling prices.

Separately, the Indian Steel Alliance today appealed to Prime Minister Manmohan Singh to take into account the negative consequences of banning exports of cement and steel. "The total percentage of exports of steel at the moment are not more than 6-8 per cent of total production. Would a total ban on the export of steel make it available at significant quantities within the country to ease inflation pressures", president Moosa Raza said.

The export ban ban comes after cement companies increased prices of the commodity by Rs 5 per 50 kg bag earlier this month. In the period between April 2007 and February 2008, cement exports stood at 3.33 million tonnes, down 38.78 per cent over the corresponding period of 2006-07 on account of higher price realisation in the domestic market.

Meanwhile, Commerce Minister Kamal Nath today clarified that the ban will not be effective on deemed exports made to EoU's and SEZ's. “We will issue a corrigendum in this regard,” Nath said at a meeting organised here by the Federation of Indian Chambers of Commerce and Industry. As per current norms, supplies to SEZ's and EoUs are considered deemed exports.

Nath also added the Cabinet Committee on Prices will meet next week to take stock of the price situation. The wholesale price index based inflation rose to a three and a half year high of 7.41 per cent for the week ended March 29.

“We have banned exports of cements. The Steel Ministry is considering many steps to bring down prices in the sector. The message is clear that the government is ready to take whatever steps required to control prices,” Nath said today at the sidelines of a CII seminar on the annual supplement to the Foreign Trade Policy 2004-09.

Sources added the CCP may meet as early as Tuesday and consider measures like banning export of steel and steel products, levying ad-valorem duty on iron ore exports and bringing down excise duty on steel to 8 per cent from the current level of 14 per cent.

Solrex close to open offer trigger for Orchid Chem

Solrex Pharmaceuticals, believed to be a Ranbaxy Laboratories-promoted company, has reportedly increased its stake in Chennai-based drug major Orchid Chemicals and Pharmaceuticals to 14.72 per cent — just short of the 15 per cent mark that will trigger an open offer to acquire the cephalosporin drug major.

A TV channel reported today that Solrex has increased its stake in Orchid to 14.72 per cent in bulk share purchase deals on Friday. The channel also said other Ranbaxy promoter group companies might have also garnered shares in Orchid.

According to the National Stock Exchange (NSE) data available yesterday, Solrex had 12.84 per cent stake in Orchid, all acquired in different deals after March this year.

The development could not be confirmed with the stock exchanges and Orchid. An official spokesperson of Orchid said he was yet to get details of the share purchase data of Orchid. Ranbaxy officials declined to comment on the developments.

A few days ago, Malvinder Mohan Singh, the managing director and chief executive officer of Ranbaxy, had stated that the company was against any hostile takeovers.

Orchid maintained that Solrex was understood to be an investment unit of Ranbaxy and the share purchases by Solrex were value picking rather than a takeover attempt.

Orchid’s Chairman and Managing Director K Raghavendra Rao has only 15.9 per cent stake in Orchid. In case of an open offer, one option before him is to utilise the warrants worth about Rs 50 lakh, which can be converted into a 7 per cent stake. This would increase Rao’s stake close to 23 per cent, said sources.

Reportedly, the Orchid management is in talks with financial institutions to convert the warrants and to rope in strategic investors to thwart the takeover attempts.

“We are observing the developments, but have not taken any decision on conversion of the warrants,” said the company spokesperson. Both Raghavendra Rao and Deputy Managing Director C B Rao are still away in Japan, as a part of the opening of a subsidiary of Orchid in Japan.

Life Insurance Corporation of India and United India Insurance Company hold 7.8 per cent and 2.48 per cent, respectively in Orchid.

Other large institutional investors in the company include Gazal Industrial Holdings (8.48 per cent), Macquarie Bank (5.13 per cent), Harpline (4.54 per cent) and Fidelity Trustee Company (2.66 per cent).

Provogue to raise Rs 314 crore

Apparel retailer Provogue India Ltd on Friday said that it would raise Rs 314 crore through the preferential allotment of 2.85 million equity shares at a price of Rs 1,100. The money will be utilised for expansion plans such as setting up stores, bringing new brands and acquisition, said the company in a note to the Bombay Stock Exchange.

Altima Partners, T Rowae Price, Genesis, New Vernon, Liberty International, Acacia Partners, Dharmayug Investment and CNBC have participated in the preferential offer, which will be locked in for one year from the date of allotment.

Provogue's board has also approved the issue of 14,84,000 convertible warrants to Everest Plaza Pvt Ltd, and Fairprice Traders (India) Pvt Ltd, at the same price of Rs 1,100 to invest side by side on the same terms with these strategic investors.

The company plans to take the shareholders approval for the preferential issue on May 9.

JK Tyres buys Mexican tyre co for Rs 270 cr

JK Tyre and Industries, today announced the acquisition of Mexican tyre company Tornel for Rs 270 cr. The acquisition would be for 100% shareholding in the company and is being made through a special purpose vehicle (SPV).

The buyout is expected to close by the end of May this year, subject to applicable regulatory approvals.

Tornel has three operating tyre plants with aggregate capacity of 6.6 mn tyres per annum. Situated in Azcapotzalco, Tultitlan and Hidalgo, the three plants of Tornel employ 2,000 people.

The company is present in the entire range of bias and radial tyres – from truck, LCV, farm and industrial tyres in bias category and truck, LCV and high speed passenger car tyres in radial category.

TVS Logistics to raise Rs 100 cr through PE

TVS Logistics Services Ltd, part of $5 billion group T V Sundram Iyengar & Sons (TVS) has raised Rs 100 crore through private equity (PE) to support its expansion plan and to reach its target of Rs 1,000 crore turnover by the year 2010. It may be noted, this is the first time PE investment has been made in a TVS Group company.

Goldman Sachs, a global investment banking and securities firm, has invested Rs 100 crore for a significant minority stake to support TVS Logistics growth plans which include expansion, increasing its investment in joint ventures (JVs)and for acquisition opportunities.

Meanwhile, TVS Logistics recently taken a 50 per cent stake in Mumbai-based Greenarches and renamed the company as TVS Infrastructure. The company proposed to invest Rs 500 crore to build logistics parks by itself and through special purpose vehicles (SPV), said R Dinesh, director, TVS Logistics Services.

He added, the company already owns 20 acres of land in Pune and 10 acres in Chennai, with plans to build up land banks of around 200 acres in centres of automotive in places like Hosur, Gurgaon, Halol, Lucknow, Singur, Uttarakhand and Indore.

TVS Dynamic Global Freight Services a new company which was formed recently by TVS Logistics Services and Dynamic Freight Forwarding Service has combined the freight forwarding business of both the entities. TVS has 75 per cent in the newly formed company. The company will focus on auto and non-auto segment and is expected to reach Rs 250 crore turnover in the next three years, he added.

Suresh Krishna, CMD, Sundram Fasteners Ltd said that TVS Logistics is planning to enter finished goods transportation after forming a joint venture and through merger and acquisitions. These JVs are expected to contribute around Rs 100 crore during this fiscal. He added, TVS Logistics Services recently entered into commutation solutions for corporate staff transportation and has plans to expand its current fleet strength from 200 buses to 1,000 buses within next two years.

As on on March 31, TVS Logistics and its joint ventures turnover was around Rs 340 crore. Domestic business contributed Rs 240 crore, while its global business contributed Rs 100 crore.

Inflation at a new high of 7.41%

Underlining the uncomfortable situation on the price front, the wholesale price index (WPI) rose to a near three and a half year high of 7.41% for the week ended March 29, 2008. Inflation had last stood above this level, at 7.68%, in the week ended November 12, 2004.

The latest spike is on account of a continued price upsurge increase in primary articles like vegetables, fruit and pulses, as well as a sharp increase in manufactured products like foundries, iron, steel, as well as basic metals. Delayed revisions to prices of some items in the WPI basket have also contributed to the spike seen this March (the index rose 2.3 percentage points within the month).

With today’s release of WPI inflation numbers for the last week of fiscal 2007-08, average annual inflation for the year stands at 4.44%, below the Reserve Bank of India’s tolerance level of 5% for the year. The WPI estimate for the week ended February 2 was also revised upwards to 4.74%, a sizeable revision from the earlier estimate of 4.07%.

“The manufactured products sub-index increased 0.9% week-on-week owing to an outsized jump of 3.8% in the prices of base metals, alloys and metal products, and a 0.8% increase in manufactured food items. The primary articles sub-index rose 0.2% week-on-week to be up 8.9% over year ago,” said Rajeev Malik, senior economist, JP Morgan.

The price spike comes even as industrial production growth picked up in February, prompting Malik to say he expects a 50 basis points hike in the cash reserve ratio in the on or before the April 29 monetary policy review.

Dharmakirti Joshi, principal economist, Crisil, said the price situation remained “very uncomfortable” on the food and vegetables front. “The data is surprising and beyond my imagination. People will have to wait for interest rates to ease and the RBI may actually tighten rates,” he said, adding that inflation would moderate in coming weeks as the impact of recent fiscal measures taken to cool prices of items like edible oil get reflected in the WPI.

The data once again underscores the problems that the United Progressive Alliance (UPA) government on trying to control prices of politically sensitive items like food, a point underscored by World Bank president Robert Zoellick in a recent speech at Washington. “Since 2005, the prices of staples have jumped 80%. Last month, the real price of rice hit a 19-year high; the real price of wheat rose to a 28-year high”, he had said.

Unity Infra bags orders worth Rs 221cr

Unity Infraprojects bagged two orders aggregating to Rs 221.85 crore from Vamona Developers and Kondapur Tower.

The company received an order worth Rs 133.59 crore from Pune-based Vamona Developers. Unity Infra has to complete the project within 18 months.

It also bagged a contract from Kondapur Tower worth Rs 88.26 crore excluding VAT and service tax to be completed within 18 months.

BCCL acquires 3.3% in SKC Retail

Bennett, Coleman & Co (BCCL), publishers of The Times of India and The Economic Times, has acquired 3.3 per cent stake in Chennai-based SKC Retail Limited for a consideration of approximately Rs 10 crore.

SKC Retail, which is not a listed company, operates its business under the brandname ‘SKC’, and has 13 showrooms in four states. The company has spent over Rs 65 crore in its expansion in Hyderabad, Bangalore and Pune where it has opened four stores so far. A senior official of SKC Retail said that the deal with BCCL is based on standard investment procedures, but did not rule out expanding it into a full-fledged advertising contract at a later point of time.

“We have been in expansion mode since the first quarter of fiscal 2006, and added over 2 lakh square feet in just Hyderabad, Bangalore and Pune over the past 120 days. These are locations where The Times of India has a substantial and growing presence. A strategic tie-up with BCCL in these locations would help add value to our efforts in aggressively penetrating these markets,” the official added.

For the financial year ending March 2007, SKC Retail saw revenues touching Rs 179 crore on a topline CAGR of 88 per cent. Revenues in 2007-08 are expected to cross Rs 260 crore.

Companies in which BCCL has picked up equity holding over the past year include Emaar MGF, Mantri Realty, Wasserstein India & Co, Abbee Consumables and Mumbai-based Clinical Research Institute.

BCCL’s investment division Private Treaties, is known to have invested in at least 130 companies so far spread across sectors which include retail, real estate, consumer durables, FMCG, floriculture, aviation, textiles and lifestyle.

Mastek Q3 net up 65% at Rs 35cr

Matesk today reported a 65% increase in net profit at Rs 35 crore for the third quarter ended March 31, 2007 from Rs 21.22 crore (excluding the contributions from Deloitte joint venture) in the corresponding quarter of the last fiscal.

Revenue for the quarter ended March 31, 2008 at Rs 238.9 crore was up 22% from Rs 195.3 crore (excluding Deloitte JV) for the quarter ended March 31, 2007.

If the Deloitte JV numbers are taken into account, the company’s net profit was down 13% from Rs 40.23 crore and revenue was up 11% from Rs 214.79 crore.

According to a release issued by Mastek today, total income, in dollar terms, increased 33% to $59.9 million in the quarter under review from $44.9 million in the corresponding period of the last fiscal. PAT was higher by 80% at $8.8million when compared with $4.9 million.

For the April-June 2008 quarter, Mastek expects consolidated total income (inclusive of other income) to be in the range of Rs 245-250 crore. Net profit after tax and minority interest is likely to be in the range of Rs 37-38 crore.

Sudhakar Ram, chairman and managing director, Mastek, said: "Other than the STG acquisition, we also had two major deals that added to the quarter numbers. Going ahead, for the full year in dollar terms, we are expecting a growth of 38-39%. For the April-June quarter we are expecting a topline of Rs 240-250 crore and net profit in the range of Rs 37-38 crore."

The acquisition of US-based System Task Group (STG) contributed close to Rs 16 core to the topline due to which the company surpassed its own guidance of Rs 220-225 crore. Its net profit, on sequential basis, also crossed the guidance of Rs 29-30 crore.

Yes Bank Q4 net rises 109%

No provision for derivatives transactions as bank says there's no delinquency.

Yes Bank, one of the new-generation private banks, on Wednesday said that its net profit more than doubled in the fourth quarter ended March 2008.

The bank said it has so far not faced any delinquency on its derivatives exposure and has therefore made no provisions for such transactions.

“The growth in profit is driven by a combination of loan and deposit growth.Our distribution, advisory and transaction banking business has also contributed to the growth in profits,” said Rana Kapoor, managing director and chief executive officer of the bank.

While net profit went up 108.7 per cent to Rs 64.5 crore, total income was up 75.9 per cent to Rs 494.3 crore, compared to Rs 281.09 crore during January-March 2007.

The bank’s advances grew 50 per cent to Rs 9,430 crore, from Rs. 6,290 crore as on March 31, 2008. The deposit base rose 61.5 per cent to Rs.13,273 crore, from Rs. 8,220 crore for the same period.

Yes Bank’s provisions and contingencies rose 80.1 per cent to Rs 22.8 crore, compared to Rs 12.7 crore during January-March 2007. Kapoor said Rs 17 crore has been set aside as “credit contingency” as it had the headroom.

“The bank has made no specific provisions for any derivative account. On account of the earning headroom, the bank has earmarked Rs 17 crore as credit contingency for the future. Additionally, a provision of Rs 1.7 crore has been made towards one corporate account which is an agricultural loan,” Kapoor said.

There is an overdue treasury receivable of around Rs 40 lakh which has been due for the last 10-15 days, but Kapoor said it was not related to derivatives.

Newsprint price spiral spells bad news for media

The bad news for newspaper publishers — and there are over 40,000 newspapers in India — has just grown worse. The price of newsprint, imported or indigenous, is set to touch $1,000 per tonne, and this after a 23 per cent increase over the previous four months that took prices to $760 a tonne in March.

Factor in the April jump and newsprint prices, which typically account for 50 to 60 per cent of production costs, have risen over 60 per cent over the last six months.

“It’s probably an industry first for prices to shoot up so much in less than six months,” said Mohit Jain, director (business & commercial), Bennett, Coleman & Co Ltd.

To be sure, newsprint prices touched $1,000 a tonne in 1995 but the price rise was over 12 months, newspaper industry professionals recall.

The outlook for the rest of the year is bleak. “We do not expect any respite for the next six to eight months,” said a newsprint importer.

The price rise has everyone worried. “Imported newsprint now costs $945 a tonne,” said an astounded Sameer Kapoor, president, Metropolitan Media Company, the joint venture between Bennett, Coleman & Co Ltd and HT Media Ltd, which prints the Delhi tabloid Metro Now.

A Mumbai-based newsprint importer, who has been in the business for 35 years, admitted that good-quality paper, especially pink newsprint, is quoting over $900 a tonne.

Imported newsprint prices have been climbing since December, but what irks Gujarati daily Sandesh’s Chairman Falgunbhai Chimanbhai Patel is that even Indian newsprint manufacturers have raised rates by Rs 5,000 to Rs 7,000 ($125 to $175) a tonne “for no reason”.

Orchid promoter to get FI support

K Raghavendra Rao, the promoter and the managing director of Chennai-based Orchid Chemicals and Pharmaceuticals Ltd, has managed to garner the support of large institutional investors to thwart a takeover attempt.

These institutions, which collectively hold 38 per cent in Orchid, have agreed to support Rao, company insiders told Business Standard.

“These are oral agreements and are usually not given in writing,” he said.

Counted with the 16 per cent held by Rao, his family and close associates, this will keep Orchid safely under Rao’s control.

Solrex (believed to be a company of the Ranbaxy promoter group), is known to have bought 12 per cent in Orchid so far, which is being seen as the first steps towards a hostile takeover of the company.

Life Insurance Corporation of India and United India Insurance Company hold 7.8 per cent and 2.48 per cent respectively in Orchid.

Other large institutional investors in the company include Gazal Industrial Holdings (8.48 per cent), Macquarie Bank (5.13 per cent), Harpline (4.54 per cent) and, Fidelity Trustee Company (2.66 per cent).

Industry observers said the large number of abbreviated new drug applications (ANDAs) filed by Orchid is one strong reason that might have motivated Solrex to take over the company.

These approvals allow companies to launch generic clones of drugs once the patent expires.

An Orchid spokesperson said the firm has 25 approved ANDAs and another 22 are awaiting approval by the US Food and Drug Administration.

The spokesperson also denied reports suggesting that Rao had roped in Prathap C Reddy, chairman of the Apollo Hospitals group, as a white knight to retain his control over Orchid. The hospital group’s spokesperson could not be reached to corroborate this.

No hostile takeovers: Ranbaxy

In an interesting twist to the Solrex-Orchid saga, Ranbaxy Laboratories today said it is against hostile takeover of any Indian pharmaceutical company.

Solrex Pharmaceuticals, which is believed to be an investment firm of the Ranbaxy promoters, has picked up a 12 per cent stake in Orchid Chemicals.

A top Ranbaxy executive told Business Standard today that the company is against any hostile takeovers and refused to either confirm or deny whether Solrex is indeed owned by promoters, Malvinder and Shivinder Singh.

He, however, said, Ranbaxy has not gone in for any hostile takeovers so far and its investments in domestic pharmaceutical companies such as Krebs Biochemicals and Industries, Jupiter Biosciences and Zenotech Laboratories were only strategic investments.

Industry analysts said the Singh brothers will adopt the same model for Orchid.

Orchid’s share prices, which went up 34 per cent in the last two trading days following reports of a possible creeping acquisition by Solrex, today fell 3.06 per cent on the Bombay Stock Exchange (BSE) to Rs 232.60 at close of trading.

Ranbaxy holds 14.9 per cent each in Jupiter Biosciences, a leading peptide manufacturer, and active pharmaceutical ingredients (API) maker Krebs Biochemicals, besides a 48 per cent stake in Zenotech Laboratories, a Hyderabad-based manufacturer with a good pipeline of cancer drugs and biopharmaceuticals.

It has strategic product supply and research and development alliances with all three companies.

Over the past two to three years, Orchid’s name had figured in most of the reported takeover attempts by overseas pharmaceutical companies like Teva of Israel, Novartis’s generic arm Sandoz and Pfizer.

Steel prices up via `surcharge`

The country’s leading steel producers have devised a new strategy to pass on rising raw material costs to the end users without raising prices.

Companies are now levying raw material surcharges while keeping the base price unchanged.

“We have put a raw material surcharge of Rs 5,000 a tonne on hot-rolled coils (HRC) with immediate effect to pass on the 200 per cent increase in coal prices,” said Seshagiri Rao, director (finance), JSW Steel.

Ispat Industries and Essar Steel have imposed a similar surcharge.

“Since there is pressure from rising raw material prices, we have decided to pass on part of that increase by means of a surcharge. As and when raw material prices come down, the surcharge could be reduced or withdrawn,” said industry sources.

Hot-rolled coils are primarily used to make pipes and have many direct industrial and manufacturing applications, including the construction of tanks, railway cars etc.

The government may soon announce a slew of measures including an export ban and an excise duty cut to bring down prices of steel and steel products.

An increase in its prices, therefore, could pressure the margins of these industries and compel them to raise product prices.

The contract price for coking coal has increased from $98 to $300 a tonne with effect from April 1, while the iron ore price has gone up from $52 to $86 a tonne.

Scrap prices have also gone up from $450-475 a tonne to $550-575 a tonne. All these changes together imply a $300-350 increase on every tonne of input cost, especially for those who have no captive resources in coal and iron-ore.

Following a meeting with Steel Secretary R S Pandey last week, steel producers had announced a price-cut of Rs 2,000 a tonne on long products. However, no change was made in HRC prices.

“The input cost of HRC has gone up enormously over the last one year. While the cost-push is in the range of Rs 12,000 to Rs 15,000 a tonne, the price increase is only Rs 7,000 to Rs 7,500 a tonne. The producers are watching the domestic and international situation,” Pandey said after the April 3 meeting.

Steel (including iron) has a weight of 3.64 per cent in the wholesale price index. The Inflation rate for the week ended March 22 touched a 40-month high of 7 per cent.

Religare makes open offer for UK brokerage

In a bid to scale up the institutional and investment banking business globally, domestic brokerage firm Religare Capital Markets, a wholly- owned subsidiary of Religare Enterprises, today made an open offer to buy London's oldest brokerage firm Hichens Harrison & Co.

Hichens Harrison has been in business for over 200 years, and is a member of the London Stock Exchange.

The open offer is valued at Rs 226.05 per share (285 pence per share) cash and values Hichens at Rs 440 crore (£55.5 million) after assuming the exercise of all outstanding options representing a multiple of 13.1 times Hichens' basic earnings per share for the 12 months ended December 31, 2007, according to officials of Religare Enterprises.

The shares of Religare closed at Rs 370 - a marginal drop of 0.15%.

Following the approval of the Reserve Bank of India (RBI), Religare Capital Market intends to make the offer through a newly incorporated wholly-owned subsidiary based out of Mauritius. The boards of Religare Capital Markets and Hichens have agreed on the terms of the recommended cash offer for the whole of the issued and to be issued share capital of Hichens Harrison.

"The acquisition will provide Religare an opportunity, as an Indian financial services group, to service the needs of Indian companies through its large global network and provide small and medium Indian corporates with much needed access to capital," said Religare Group CEO Sunil Godhwani.

Britannia suspends Chennai ops, offers VRS

Biscuit maker Britannia Industries (BIL) has informed the Bombay Stock Exchange today that its manufacturing operations at its Chennai factory have been suspended effective April 7, 2008. The capacity at this plant in Chennai is 1,000 tonne per month and this will be distributed to in-house and outsourced plants. Britannia currently has a capacity to manufacture 48,000 tonne every month of which 40,000 tonne is outsourced, with the remaining produced in-house.

When contacted, Durgesh Mehta, chief financial officer, Britannia, told Business Standard, "This is part of our manufacturing strategy and we are closing this unit in Chennai to optimise the cost of sourcing. There are 200 people at this unit and over a period of time the VRS package will be around Rs 5 crore."

The VRS scheme offered by Britannia has already been accepted by a large majority of the workmen. However, this is the second factory of Britannia that has suspended production after the company's Mumbai factory which is not operating currently due to labour issues. The case between the company and the workmen at the Mumbai factory is registered with the Bombay High Court.

Even Hindustan Unilever was affected due to labour unrest and its factory closure resulted in its personal care products business suffering in the third quarter last year.

Garware Offshore to buy 5 vessels for $100mn

Shipping services firm Garware Offshore Services Ltd (GOSL) will acquire five ships - three tugs and two platform supply vessels - for a total of $100 mn.

The company will purchase three anchor handling tugs-cum-supply vessels for around $13.5-15.5 million each, of which two are scheduled for delivery in June and August 2008. The third vessel will be delivered in February 2009, the company said in a statement.

GOSL will also buy two platform supply vessels, for around $27 million each, which are scheduled for delivery in June 2008 and January 2009.

The boom in the oil exploration and production sector brings with it tremendous opportunities for Garware Offshore creating increased demand for such vessels. To match the industry expectations, our company has added new vessels which will enable us to reach to a fleet size of 13-14 vessels by financial year 2010,” GOSL vice chairman and managing director Aditya Garware said.

The company, which is expanding its fleet size, has taken delivery of three platform supply vessels, with two more scheduled for delivery in June 2008 and January 2009.

In addition, 3 anchor handling tugs-cum-supply vessels are scheduled for delivery in mid-2008 and early 2009.

Solrex buys buoy Orchid

The share price of Chennai-based Orchid Chemicals and Pharmaceuticals soared 15.83 per cent on the Bombay Stock Exchange today on reports of a possible takeover bid by Solrex Pharmaceuticals, a company believed to be controlled by the promoters of Indian pharma major Ranbaxy.

There were unconfirmed reports today of Solrex scaling up its stake in Orchid to 12.87 per cent from 9.54 per cent yesterday.

Orchid shares closed at Rs 239.95 against Rs 207.15 on Monday but the Ranbaxy scrip fell 2.71 per cent to close at Rs 470.75.

Ranbaxy refused to comment on the development and an Orchid spokesperson said, “We will not comment on speculation and are yet to get details on the bulk share purchaser.”

Solrex, which had a 4.62 per cent stake in Orchid earlier, bought 2.26 million shares on Friday, and 972,000 shares on Monday to increase its stake to 9.54 per cent.

The promoters of Orchid only hold 15.87 per cent, according to the latest available shareholding data. If Solrex crosses the 15 per cent threshold, it can make an open offer for a takeover under Sebi norms. The open offer will have to be made at Rs 236.34, Orchid’s average share price for the last six months.

Around a dozen institutional investors hold about 38 per cent in the company, Macquarie Bank Ltd (5.13 per cent), Life Insurance Corporation of India (4.91 per cent) and Harpline Ltd (4.54) among them. Orchid is banking on their support to counter the takeover attempt.

Orchid also has a $200 million Foreign Currency Convertible Bond (FCCB) issue that can be converted into shares, said sources.

Sources at financial institutions said they will adopt a wait-and-watch strategy. “Orchid Pharma has not written to us yet and we need time to study the whole thing. We need to see what value addition Ranbaxy will bring, what impact the takeover will have on our investments,” a source said.

“It is an insignificant thing for us. We have investments in several companies. When the time comes, we will decide. So far no one has written to us,” added another institutional shareholder.

A source close to the Ranbaxy management said Solrex was a personal family investment arm of the Ranbaxy promoter family and the investment in Orchid was more of a personal investment than a takeover attempt. But few are willing to buy that argument.

Religare, a Ranbaxy promoter group company that had sold its shares in Orchid recently, distanced itself from Solrex. “We have no connections with Solrex. Any information linking Religare to Solrex is incorrect,” the company’s CEO and Managing Director Sunil Godhwani said.

“It is definitely a hostile takeover attempt by Solrex. Orchid is a good company to buy and whoever takes over will be having management control of a Rs 2,400-crore company,” an industry expert commented.

Added Sarabjit Kaur Nagra, a pharmaceutical analyst with Angel Broking, “Orchid has made significant investments in world-class bulk drug manufacturing facilities in the last three years and it is emerging as a major player in the cephalosporin anti-bacterials and non-cephalosporin antibiotic products. This will help Ranbaxy access the strengths of Orchid, especially in the US and European markets.”

The 16-year-old Orchid has two manufacturing sites for active pharmaceutical ingredients (APIs) at Alathur near Chennai and at Aurangabad near Mumbai and three manufacturing sites for dosage forms at Irungattukottai and Alathur in Chennai. It also has two research and development centres at Sholinganallur and Irungattukottai near Chennai.

WNS buys UK-based Call 24/7 for Rs 77cr

NYSE-listed WNS (Holdings), a provider of business process outsourcing (BPO) services, has acquired UK-based Call 24/7-- an auto insurance claims processing services provider.

The total consideration for the acquisition includes cash of approximately £8 million (approximately Rs 64 crore) on completion of the deal, and a contingent earn-out of up to approximately £1.6 million (approximately Rs 12.8 crore) to be determined based on certain performance metrics for the fiscal year ending March 31, 2009.

WNS has acquired all shares of Chang, the Stockport, Cheshire-based holding company in which Call 24/7 is the key operating entity pursuant to a definitive agreement with the shareholders of Chang. WNS funded the cash payment made at the deal’s completion from existing cash and cash equivalents and expects to fund the earn-out payment also from existing cash and cash equivalents.

WNS will integrate Call 24/7 into WNS Assistance, a division of WNS Global Services UK, a subsidiary of WNS. The deal will enable the company to extend its market leadership position in accident claims management in the UK. WNS Assistance and Call 24/7 each leverage cost-efficient claims processing, technology and engineering and collision-repair expertise to deliver quality service throughout the accident-management process.

"Call 24/7 is a highly synergistic acquisition, and an addition to a proven business model that will strengthen our position as a leading auto claims administrator in the UK market. We are excited by the growth prospects of this deal, which we expect to be earnings-per-share accretive within the first year," said Neeraj Bhargava, CEO, WNS Global Services.

"The joint experience of Call 24/7 and WNS Assistance will create a compelling value proposition for UK insurance firms," said Ian E. Griswould, Chairman and Principal, Call 24/7.

TCS signs fresh contract with Chrysler LLC

Tata Consultancy Services has signed a new multi-year contract with Chrysler LLC to provide a comprehensive portfolio of IT services. The scope of this contract integrates the contract TCS announced in February with Chrysler.

TCS will deliver IT application and maintenance support services to Chrysler by leveraging its Global Network Delivery Model™ from various locations around the world as well as the recently announced TCS Seven Mills Park domestic delivery center outside Cincinnati, Ohio and through a locally recruited team in the Detroit, Michigan region. The project will include a portion of several functional areas within Chrysler such as sales and marketing, shared services, product development and after sales.

TCS's Global Network Delivery Model is a collaborative, best-in-class framework of people, processes and infrastructure. The, model taps on TCS's global intellectual assets of tools, methodologies and products to help customers reduce implementation time, realize benefits quicker and achieve business goals.

Pyramid to invest Rs 35-40cr for 10 reg films

Chennai-based movie theatre chain, Pyramid Saimira Theatre will invest Rs 35-40 crore towards producing ten Tamil movies this fiscal year.

The company will produce a total of 52 movies this year. It has already completed 6 films in various languages and more than 7 films are under production in various languages.

Some of the producers that Pyramid Saimira Production International will work with include Kovai Thambi, Amudha Durairaj, Sangili Murugan, Ramanathan, Karumari Kandasamy, Ramasubbiah, Azhagan Tamizhmani, K Balachander, K Rajan, Radharavi and A K Vishnuram.

Speaking on the occasion, P S Saminathan, managing director, Pyramid Saimira Group said "Pyramid Saimira believes in scale and speed of execution. Production business however requires much higher level of creativity compared to other segments like exhibition and distribution. The company has created a huge eco system for production, creates process to flower creativity and has laid the foundation to become one of the largest production houses in the world both in numbers as well as in quality."

Gammon Infra to hike stake in Vizag Seaport

Gammon Infrastructure Projects, a unit of construction firm Gammon India, will increase its stake in Vizag Seaport (VSPL) for about Rs 33 crore.

According to a release issued by Gammon Infrastructutre to the BSE today, the company has exercised its call option to purchase 2.28 crore shares from the joint venture partner International Port Services.

VSPL has also allotted 80 lakh shares to Cochin Bridge Infrastructure Company, a subsidiary of Gammon Infrastructure, on conversion of loan into equity at par, the release added.

"Upon completion of the two transactions, the shareholding of Gammon Infrastructure in VSPL would stand increased to 73.76% from the present 42.22%," the release said.

VSPL owns two berths handling bulk cargo at the Visakhapatnam Port.

Ashok Leyland FY08 sales up marginally

Hinduja Group flagship Ashok Leyland finished the year ended March 31, 2008 with sales of 83,309 vehicles when compared with 83,094 units sold in 2007, according to an official statement released today.

Domestic sales in the M&HCV segment dropped to 75,408 units from 76,736 units, but domestic LCV sales increased to 615 units from 333 units sold in 2007.

Exports increased 21% to 7,286 vehicles from 6,025 in FY07. Total production for the year was 84,006 units when compared with 83,558 units in the last fiscal.

Eicher Motors sales decline marginally in March

Eicher Motors today reported a marginal decline in sales at 3,704 units in March when compared with 3,730 units sold in March 2007.

Domestic sales were flat at 3,297 units when compared with 3,283 units in March 2007. Exports declined 9% to 407 units from 447 units.

For the year ended March 31, 2008, sales increased 6% to 29,827 units from 28,072 units sold in FY07.

Yahoo! rejects Microsoft's latest move

Yahoo! has issued a further rejection of Microsoft’s $42bn approach describing its threat to take its offer direct to shareholders as "counterproductive" and inconsistent with its claim to want a friendly transaction, according to a report on the website of Financial Times.

The letter from Yahoo’s board to Steve Ballmer, chief executive of Microsoft, was released on Monday morning after the weekend publication of a letter from Mr Ballmer signalling the software group’s impatience at the lack of progress since it made its approach public on January 31.

The directors restated their argument of February 11 that Microsoft’s terms failed to reflect Yahoo’s value adding that the decrease in Microsoft’s stock price had made the proposal worth "significantly" less than when it was announced.

"Contrary to statements in your letter, stockholders representing a significant portion of our outstanding shares have indicated to us that your proposal substantially undervalues Yahoo!," the directors added.

Sebi cuts filing fees for public issues

Securities and Exchange Board of India (Sebi) has reduced the filing fees for documents of public issues, buybacks and draft letter of offer while acquiring a company.

The regulator has made amendments to the Sebi (Merchant Bankers) Regulations, 1992, Sebi (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and Sebi (Buyback of Securities) Regulations, 1998.

Sebi will henceforth charge a flat fee of Rs 25,000 for public issues less than or equal to Rs 10 crore. For an issue more than Rs 10 crore but less than or equal to Rs 1,000 crore, Sebi will collect 0.125% of the offer. For an issue more than Rs 1,000 crore but less than or equal to Rs 5,000 crore, a fee of Rs 1.25 crore will be charged in addition to 0.03125% of the offer size in excess of Rs 1,000 crore. A flat charge of Rs 3 crore will be charged for issues more than Rs 5,000 crore.

Sebi has also amended the fees for custodians who will have to pay 0.0005% instead of 0.001%.

For mutual funds, Sebi has brought down the filing fees to 0.005% of the amount raised via a new fund offer subject to a minimum of Rs 1 lakh and a maximum of Rs 50 lakh. The regulator has also slashed the registration fees payable by mutual funds from Rs 50 lakh to Rs 25 lakh.

The regulator has also specified fees for share buybacks and rights issues. For venture capital funds, the regulator has made changes in the registration fees by bringing them down from Rs 10 lakh to Rs 5 lakh.

The amendments, which will be called Sebi (Payment of Fees)(Amendment) Regulations, 2008, came into force from April 1, 2008.

Steel firms may pay 200% more for coking coal

The prices of coking coal, which accounts for 50% of the raw material cost for steel producers, are expected to go up by over 200% in the current fiscal.

Industry sources said Posco, the world’s fourth largest steelmaker, has just settled contracts at prices 205-210% higher than the previous level of $98 per tonne.

Posco’s contract with Australian miners, effective April 1, would hold good for Indian steel producers importing coking coal primarily from Australia.

C G Patel, director (commercial), Rashtriya Ispat Nigam (RINL), said the last contract price was between $94-98 per tonne, which implies that increase in prices is to the tune of Rs 8,000 per tonne for domestic producers.

"Add to it an increase in ocean freight rate by $25-$35 per tonne, and the increase in cost would be close to Rs 9,000 per tonne," he added.

RINL has no captive mines and imports its entire coking coal requirements from Australia.

Industry sources pointed out that the cost increase being calculated had not factored in the iron ore contracts, which were imminent. "The cost push on account of coking coal is over and above the Rs 6,000 per tonne cost, which has not been recovered by the industry," said sources. Iron ore accounts for 35-40% of the cost of steel production.

IOC to spend Rs 800 crore for rural retail

Indian Oil Corporation (IOC), the largest domestic oil marketing company in the country, is planning to invest Rs 800 crore during the financial year 2009 to expand and modernise its petrol stations, according to a top company executive.

The company’s petrol pump stations at the end of the financial year 2008 stand at 17,600 and it plans to add 1,195 new outlets in the financial year 2009.

G C Daga, director - marketing, IOC, said that a majority of these stations would come up in rural areas.

IOC’s expansion is taking place when oil marketing companies are grappling with an extremely difficult operating environment.

In the last fortnight of March 2008, for instance, oil marketing companies’ under-recoveries from petrol sales exceeded Rs 8 per litre, while diesel under-recoveries reached more than Rs 15 per litre, according to analysts.

IOC, which accounts for nearly half of the total petroleum products sales in the country, has seen a strong growth in sales of diesel and petrol for the 12 months ending March 2008.

The company’s petrol sales were 4.3 million tonnes in the financial year 2008, a rise of nearly 12.5 per cent y-o-y.

The company accounted for 42.5 per cent of the total petrol sales in the country in the financial year 2008, the company executive said.

IOC’s total diesel sales were 17.6 million tonnes in the financial year 2008, a rise of 14 per cent y-o-y. The company’s market share for diesel was nearly 47 per cent in the financial year 2008.

The executive said a strong demand for diesel from the power, mining and construction sectors fuelled growth.

In the first nine months of the financial year 2008, IOC’s profit before tax grew by 52.6 per cent y-o-y to Rs 10, 749.9 crore.

Oil bonds worth Rs 11, 460.70 crore from the Central government and the Rs 8,946.70 crore subsidy sharing by upstream players helped the company post a robust PBT.

ITC aims at top spot with aggressive expansion plan

Plans to get there through brand-building, enhancing supply chain.

ITC is planning to aggressively scale up its FMCG business and expand its product portfolio in an attempt to be the leading FMCG player in the country.

According to company executives, this would be achieved through a combination of synergistic investments in brand-building and enhancement of the supply chain and sales and distribution capabilities.

The new FMCG businesses of ITC grew by 68 per cent in 2007.

ITC is planning to launch nearly 14 new variants of its existing packaged food brands including Bingo, Sunfeast, Aashirvad and Kitchens of India.

Ravi Naware, CEO of ITC’s foods business, said, “We are constantly developing new products as upgradation is imperative in any FMCG business. We will introduce about 14 variants in our existing brands. The new products will build on the health platform, easy preparation and convenient foods.”

In 2007, ITC’s branded packaged foods business recorded a sales growth of 51 per cent over the previous year. The company made a foray into the organised salty snacks market with the launch of Bingo range of potato chips and finger snacks. Its range of offerings thus exceeded 150 distinct food products under six brands

Bingo currently has 16 variants, while Sunfeast has 18 variants.

ITC also intends to introduce a complete range of personal care products in an attempt to widen its product portfolio and strengthen its position in the Rs 2,700 crore skincare market.

According to Sandeep Kaul, CEO of the personal care business of ITC, “Although we offer premium products in terms of benefits and price points, we have noticed good sales for our personal care products within a few months of launch. We would soon announce the annual sales figures.”

ITC launched ‘Vivel Di Wills’ and ‘Vivel’ range of soaps in February 2008. In September last year, the company had launched three variants of Fiama Di Wills, a premium range of shampoos, following the success of Essenza Di Wills, its exclusive range of fine fragrances and super premium personal care products.

At the same time, the greetings, gifts and stationery business (GGSB) division of ITC is set to significantly expand its product portfolio by diversifying into writing instruments and offering customised solutions to the corporate houses.

The stationery business contributes about Rs 180 crore to the company’s revenues and according to a company executive, “We are aiming to achieve Rs 1,000 crore revenue from this business arm within three years.”

ITC’s stationery business is growing by over 100 per cent per annum and with the addition of new products, including office and letter writing instruments, these targets are within reach, the executive claimed.

The Classmate brand alone contributes about Rs 150 crore.

Data estimates the market for school and education sector at Rs 5,000 crore. Large global chains such as Staples and OfficeOne have already made an entry and this market is poised for further segmentation.

Simultaneously, Wills Lifestyle, the garment retailing arm of ITC, is aiming at a growth of 30 per cent, and has embarked on a major rejuvenation and brand makeover plan through a series of new-look stores, launch of premium product-lines, and tie-ups with leading architecture and management companies for superior product presentation inside stores.

The aim is to offer innovation in sync with changing consumer preferences as well as make a lifestyle statement and build the brand around a more desirable look and shopping experience.

The revamp is expected to help the company grow by 30 per cent. During 2007, ITC’s lifestyle retailing arm grew by 52 per cent in both the premium and popular segments.

According to Atul Chand, vice-president - marketing and retail of ITC, “We will revamp our existing 50 stores and give them a new look in terms of design and architecture.

The pilot project has been carried out at two stores in Mumbai and one in Delhi. This will be extended to all the existing stores.”

The company plans to take its total number of stores to 100 in one year from the current 50. It is also looking at setting up Wills Lifestyle stores in tier-II cities including Siliguri and Raipur.

The new stores would reflect the ongoing brand makeover exercise.

ONGC OVL to invest $450 mn in Venezuela

ONGC OVL will be investing around $450 million in Venezuela where the company has picked up a 40% stake in an oil gas block, Union Petroleum Minister Murli Deora said.

The block in San Cristabel has a reserve of around 250-million tonnes, he told reporters here today.

Deora said he would be going to Venezuela tomorrow to sign an agreement to this effect with PDBSA, which holds the remaining 60% in the block.

Production is expected to start in about three years time, the Minister said.

Tyre prices set to increase in April

Domestic tyres prices are set to go up across all categories in April. “We will be increasing our prices by 5 per cent from mid-April across all categories,” said Arnab Banerjee, V-P (sales & marketing), Ceat Tyres. This price hike will be the second one this year.

The first price hike of around 1.7 per cent by some tyre manufacturers was effected in February. Following a cut in excise duty spelt out in the Union Budget, tyre majors cut prices between 1.7 and 2 per cent in March.

While J K Tyres and Ceat have confirmed their latest price hikes, Apollo Tyres and MRF may do so soon. “The process of taking a final decision on prices is currently on,” said Sunam Sarkar, chief, corporate strategy & marketing, Apollo Tyres.

Tyres made in India have a ratio of natural rubber (40 per cent) and petroleum derivatives (60 per cent). Between the last quarter of 2007 and the first quarter of 2008, average prices of natural rubber rose by 4 per cent, while synthetic rubber moved up by 18 per cent.

Prices of chemicals and carbon black hardened by 16 per cent and 11 per cent, respectively. The highest price increase was witnessed in butyl rubber at 33 per cent.

On an average, prices of raw materials have appreciated between 12-15 per cent during the first quarter of 2008.

And tyre majors have initiated a price increase of about 5 per cent.

Tyre dealers in the country have termed the impending price hikes as opportunistic and arbitrary. They say the frequent price hikes could hurt the trucking industry the most as the cargo industry is a price senstive business.

“30 per cent of the operating costs for a trucker are spent on tyres and the rest on diesel. Any increase in the inputs for running a truck would directly push up transportation costs. Whether this cost will be passed on only time will tell,” said S P Singh, convenor, All India Tyre Dealers Federation (AITDF).

Tyre dealers say there’s little correlation between the increase in raw materials and the prices demanded by domestic tyre manufacturers. They allege price cartelisation by the manufacturers.

But tyre manufacturers beg to differ. A case in point is 2006, when prices of raw materials fluctuated steeply.

“Despite the frequent changes in the prices of raw material such as natural rubber, which rose as much as 24 per cent to Rs 111/ kg in July 2006. We had initiated small and steady price hikes ranging between 4-6 per cent across all tyre categories in the following months,” said AS Mehta, director (marketing), JK Tyre.

“And when prices of natural rubber dipped in September, we were prompt to roll back our prices by 5 per cent. While the overall price hike was 12 per cent for 2006, the effective hike was only 7 per cent for that year,” he added.

RIL plans foray into rig making

Reliance Industries, the petrochemicals giant, is planning to manufacture its own rigs to overcome a global shortage of deep water drilling rigs, which is affecting its exploration business.

“We are looking to enter the rig manufacturing business,” told RIL President Petroleum International Business Atul Chandra today.

The company had sought a three-year drilling holiday for exploring nine deep sea blocks, which it won through NELP auctions due to rig shortage in October 2007.

Reliance Industries (RIL) has committed to drill 73 wells in the three NELP-I blocks, five NELP-III blocks and one pre-NELP block, requiring more than 12 dig years to accomplish the programme.

Apart from this, it currently has two deep water rigs — C Kirk Rhine and Deep Water Frontier. It had contracted three more rigs — Expedition, D534 and Neptune — for mobilisation by June 2006, August 2006 and January 2007 respectively, with an additional rig, Blackford Dolphin, slated to join the fleet in October 2007.

Despite executing the required contracts, the mobilisation of rigs were always subject to availability.

While Expedition is not expected to be there before October 2008, Neptune and Blackford Dolphin will not come before May 2008.

The cost of hiring for drilling rig works out $450,000 a day and it makes more business for the company to manufacture these equipment on its own.

The company may rope in a partner for this business, said Chandra, adding that RIL plans to enter this business either by this financial end or by beginning of the next.

Shipping firms looking for discount buying

Indian shipping companies are looking for discount buying in international shipyards, which have seen a spate of order cancellations on account of credit crunch and freight rate correction.

The Baltic Dry Index, the benchmark for freight rates for bulk carriers, touched an all-time high of 11,039 on November 13, 2007, up from 2,438 on January 3 in the previous year.

This was the period when lots of speculative buyers booked orders with international shipyards. According to an analyst’s estimate, about 45 per cent of the orders booked in the shipyards currently are for dry bulk carriers.

With the credit crunch in the market, big companies with good credit ratings are finding the effective interest cost higher by 100 to 150 basis point from the rates in December. And the bankers are shying away from the speculative buyers as well as small and medium size companies which have high credit risk.

Besides, the freight rates have also corrected; the Baltic index touched a low of 5615 on January 29 this year, and was at 7737 on April 4.

“There have been orders booked on speculation and as the cancellations come, we expect buying opportunities at a lesser price in the near future,” said Kowshik Kuchroo, vice-president, business development, of Mercator Lines that has tanker, product carriers as well as bulkers.

Jubilant acquires DRAXIS for $225 mn

Leading contract drug maker Jubilant Organosys today announced the acquisition of Canadian speciality drug company DRAXIS Health for $255 million (around Rs 1020 crore).

The board of DRAXIS has given its unanimous approval and the transaction is expected to close in the second quarter of 2008 after the necessary shareholder and court approvals.

This is Jubilant’s second major acquisition in North America, after it bought the US injectable maker Hollister for $122 million in April 2007.

The DRAXIS acquisition will help Jubilant expand its contract manufacturing business in the regulated, high-growth and high-margin area of radiopharmaceuticals and injectables.

DRAXIS has products in three categories: sterile products, non-sterile products and radiopharmaceuticals.

Commenting on the acquisition, Shyam S Bhartia, chairman and managing director and Hari S Bhartia, co-chairman and managing director, Jubilant, said, “With this acquisition, Jubilant will be among the leading providers of contract manufacturing of small volume parenterals to large pharmaceuticals and biotech companies in North America. DRAXIS has an excellent regulatory track record, with its management and employees having a wealth of experience and expertise in radiopharmaceuticals and contract manufacturing. Jubilant is committed to grow DRAXIS by supporting its management and employees through new product launches, entry into new markets and expansion of the customer base.”

According to a Jubilant release, the transaction agreement contains customary non-solicitation provisions, but permits DRAXIS to terminate the arrangement and accept an unsolicited superior proposal, subject to fulfiling certain conditions.

DRAXIS has agreed to pay Jubilant a break fee of $10.5 million if the transaction is not completed. Jubilant plans to fund the acquisition through a combination of cash-on-hand and debt. The transaction is not contingent on any financing conditions.

Jubilant Organosys is an integrated pharmaceutical industry player, one of the largest custom research and manufacturing services (CRAMS) and drug discovery and development services companies out of India.

The company has a presence across the pharmaceutical value chain for products and services such as exclusive synthesis, contract manufacturing, proprietary products, active pharmaceutical ingredients, generic dosage forms, drug discovery services, drug development services, chemistry services and clinical research services.

Jubilant has diversified its manufacturing facilities across eight locations world-wide: Gajraula (UP), Nanjangud (Karnataka), Roorkee (Uttarakhand), Nira (Maharashtra), Udaipur (Rajasthan), Samlaya (Gujrat), Salisbury in Maryland (USA) and Spokane in Washington (USA).

These facilities together help Jubilant in catering to more than 130 customers across 50 countries.

The shares of the company gained by Rs 0.45, or 0.13 per cent, to settle at Rs 338 with total volumes of 41,622.

i-flex to be called Oracle Financial Services

i-flex Solutions has changed its name to Oracle Financial Services, to reflect its close strategic and operational alignment with its parent, Oracle Corporation, which owns 81% stake in the company.

According to a release issued by the company to the BSE today, the company's board has approved a proposal to change the name, subject to regulatory and shareholder approvals.

"The new identity will enable us to better leverage the global reach, infrastructure and brand visibility of Oracle to accelerate our growth," said N R K Raman, CEO and managing director.

The new branding strategy demonstrates the synergies of scale, resources, expertise and efficiency across the two organizations, he added.

The current management team under N R K Raman will continue to run the operations of the company, the release added.

Further, the company's board has approved buying the balance 60% stake in Flexcel International, thus making it a wholly-owned subsidiary. Flexcel is a joint venture between HDFC Bank and i-flex solutions. The company will acquire 3.1 million shares of Rs 10 each.

ACC March sales up 4.9%

ACC cement production rose 5.59% in March 2008 at 1.89 million tonne as against 1.79 million tonne in March 2007.

According to a release issued by ACC to the BSE today, cement despatches during the month was also 4.92% higher at 1.92 million tonne compared with 1.83 million tonne.

In the 2008 calendar year so far (January-March), ACC produced 5.24 million tonne of cement - 6.50% higher when compared with 4.92 million tonne produced in the same period last year.

Cement despatches for the March quarter were up 7.09% at 5.29 million tonne as against 4.94 million tonne in the year-ago period.

Telcon buys majority stake in Spanish firm

In yet another acquisition in a week's time, Telco Construction Equipment Company (Telcon), a subsidiary of Tata Motors focussed on construction equipment sector, has signed an agreement to acquire controlling stake with 60% equity of Comoplesa Lebrero SA of Spain. Comoplesa Lebrero SA, located in Zaragoza, is a market leader in Spain with its Lebrero brand in the manufacturing, marketing and servicing of compaction equipment. Telcon has not disclosed the size of the deal. "Comoplesa Lebrero had generated 20 million euros (Rs 125 crore) revenues during the last financial year," Ranveer Sinha, managing director of Telcon told Business Standard. "This acquisition helps Telcon strengthen and add relevance tothe last week's Serviplem deal of enhancing product ogfferings in the road and general construction value chain," he said.

Last week, Telcon had bought over 79% stake in Serviplem SA, a global top six player in transit mixers, dry bulk tankers and pumps. Lebrero was already dealing with Telcon over the past four years in sourcing components for its products, said a press release. Telcon is a joint venture between Tata Motors and Hitachi Construction Machinery Company of Japan, which holds 40 per cent in the JV.

S&P lowers Tata Motors credit rating

Standard & Poor's Ratings Services has lowered its corpoarte credit rating on Tata Motors to 'BB' from 'BB+'.

The agency has also lowered its rating to 'BB' from 'BB+' on all Tata Motors' rated debt. The ratings remain on CreditWatch with negative implications.

These rating action comes after Tata Motors' recent announcement on its agreement with Ford Motor Company for the purchase of Jaguar and Land Rover, comprising brands, plants, and intellectual property rights.

The transfer of ownership to Tata Motors, as announced, is expected to close by the end of the second quarter of 2008, subject to applicable regulatory approvals.

Tata Motors will pay about $2.3 billion in cash for Jaguar and Land Rover, out of which Ford will then contribute up to $600 million to the Jaguar-Land Rover (JLR) pension plans.

"The rating action reflects Tata Motors' heightened financial leverage, resulting from the $3 billion bridge loan mobilized to fund this transaction," said Standard & Poor's credit analyst Anshukant Taneja.

"It also reflects a more challenging business environment, both for the company's domestic passenger and commercial vehicle segments in India and for the high-end luxury car segments in the key markets for Jaguar and Land Rover."

Tata Motors intends to fund the acquisition with new equity of up to $1 billion. While the company has demonstrated adequate financial flexibility and benefits from its parentage, S&P's would factor in the impact of such equity inflows only when they are successfully concluded, a release from the company stated.

While JLR has recently demonstrated some improvement in its profits and cash flows, this trend remains susceptible to changing demand and rising operating costs, both of which are currently vulnerable in prevailing macroeconomic conditions.

In this backdrop, Tata Motors also intends to continue with its relatively aggressive capital spending plans for its existing Indian operations as well as the newly acquired JLR operations.

"This could result in still higher leverage and a potentially protracted improvement in its credit metrics," Mr. Taneja said. "Nonetheless, the increase in Tata Motors' geographic diversity and presence in uncorrelated business segments, which may add to revenue stability, has been factored in the current ratings."

The CreditWatch negative position reflects concerns related more to Tata Motors' long-term financing arrangements for replacing the existing bridge facility and limited details on its plans for the transition of JLR operations. A greater level of certainty addressing these issues would be required for the CreditWatch resolution.

Overall, the likelihood of a further lowering of the ratings is relatively low assuming: (1) the bridge facility refinancing risks are addressed, (2) Tata Motors' capital commitments to its domestic operations and to JLR remain broadly at the levels given by the company, and (3) the transition of the JLR assets from Ford proceeds as expected.

Nitin Fire Protection buys 40% in Dubai co

Nitin Fire Protection Industries has acquired 40 per cent stake in a Dubai based fire protection company New Age Company LLC.

New Age Co, a professional fire protection engineering company providing equipments, was established in 1976 at United Arab Emirates (UAE). It has offices in Abu Dhabi, Dubai and Sharjah and has experience in installation in all the seven Emirates, Nitin Fire Protection Industries informed the stock exchanges.

The company did not disclose the deal size. The stake was bought by Nitin Fire Protection Industries' 100 per cent subsidiary Nitin Venture FZE, UAE.

New Age Co is engaged in manufacture and installation of fire protection and detection systems, emergency lighting system, water mist fire protection system and the entire activity includes supply and installation, testing and commissioning of equipment system and maintenance, said the release. For the year ending 2007-08, Nitin Fire had net sales of Rs 44 crore.

HUL to buy raw materials from farmers

FMCG major Hindustan Unilever plans to directly source raw materials for its food brand Kissan from the farmers. The step is HUL’s effort to integrate the company’s brands with its social, environmental and economic agenda.

The company has identified five key platforms like health & nutrition, women empowerment, water conservation, cutting greenhouse gases and enhancing livelihood to drive its long term sustainable strategy. Harish Manwani, chairman, HUL said, “We have made specific choices which are based on the needs of the nation and the capabilities and skills we can bring to bear on these. We have identified five key platforms and have articulated goals, both short term and long term goals, stretching to 2015.”

HUL intends to pass on the entire economic benefit of backward integration for the Kissan brand to the farmers. Amongst the other initiatives it plans to enhance livelihood of 75,000 women in a sustainable manner and undertake water harvesting at around 10 manufacturing units. Addressing the annual general meeting Manwani informed that HUL aims to become water positive across all its operations by 2015. Since 2002, the company has reduced 50 per cent per tonne water usage in its manufacturing operations.

He mentioned that the company has embraced Unilever’s ambitious target to reduce 25% carbon dioxide from energy in manufacturing operations per tonne of production by 2012, against a baseline of 2004. The company has recently developed a new process of manufacturing soap based on ‘plough share mixer’ technology which eliminates the need for steam in soap making.

Manwani stated that competing for non-consumption itself will drive huge growth for HUL. He said, “Our value creating model is simple, competitive and profitable growth. In 2005, Unilever embarked on a new business model - 'One Unilever' that leverages our global scale with sharper strategic clarity and focus on operational excellence.”

Crisil revises Ashok Leyland outlook to -ve

Rating agency Crisil has revised its rating outlook on the non-convertible debenture programme of the commercial vehicle manufacturer Ashok Leyland to ‘negative’ from ‘stable’ and reaffirmed its rating on the company’s commercial paper programme at ‘P1+’.

The revision in outlook reflects the likelihood of Ashok Leyland’s financial leverage increasing over the medium term, owing to its large committed debt-funded capital expenditure and investment plans. Due to the increased financial risk, the rating could become vulnerable in the scenario of a continued slowdown in the domestic medium and heavy commercial vehicle (M&HCV) segment, a release from the Crisil stated.

The agency expects that Ashok Leyland will implement its Rs 2,000 crore M&HCV project in Uttaranchal by March 2010 in order to avail of the fiscal benefits offered by the government. In addition, the fiscal benefits offered by the Uttaranchal project would also benefit the company over the medium to long term.

The deterioration in Ashok Leyland’s financial profile may correct itself over the medium term if M&HCV sales revive and the benefits from the capacity enhancement are realised. The performance of the domestic M&HCV industry and the ability of Ashok Leyland to reduce its exposure to the M&HCV market through its ventures in the light commercial vehicle (LCV), passenger vehicle, and engine segments, and through exports, will be key determinants of the company’s credit quality in the context of its increased financial risk profile.

Ashok Leyland’s operating margins for 2007-08 are estimated at 9.5 per cent in spite of a significant increase in raw material costs. Continuous cost reduction efforts, recent hikes in vehicle prices, and an improved working capital cycle are expected to cushion pressures on the company’s operating margins from input price hikes.

The company is slated to increase its capacity to 184,000 vehicles per annum from the current 84,000 vehicles per annum over the next four to five years. The rating is also constrained by Ashok Leyland’s vulnerability to cyclicality in the domestic demand for CVs, and limited success in the fast-growing LCV segment.

Inflation rises to 40-month high of 7%

The bad news on inflation continues with the wholesale price index (WPI) rising to a 40-month high of 7 per cent for the week ended March 22, raising expectations of higher interest rates and more government intervention to cool prices.

The Inflation rate last stood above this level, at 7.07 per cent, in the week ended December 4, 2004.

The latest figure is well above some estimates including a Reuters forecast of 6.62 per cent and a Bloomberg News Survey projection of 6.64 per cent.

As an immediate measure, the government has withdrawn the duty entitlement passbook (DEPB) scheme benefits on export of basmati rice.

The move, aimed at discouraging basmati rice exports and augmenting domestic availability, comes after two days of an increase in the minimum export price (MEP) of the commodity.

Reliance to invest Rs 30,000cr for fab units

* 7 proposals worth Rs 65,000cr received till date; Govt. has targeted Rs 40,000cr investment

* Reliance to invest around Rs 30,000cr to set up fab, ATMP facilities; Site: Maharashtra, Gujarat, Hyderabad, Mysore or Haryana

* Videocon: Rs 8,000cr; Site: Navi Mumbai

* Moser Baer: Rs 6,000cr; Site: Oragadam (New Chennai)

* Titan Energy: Rs 5,880 cr; Site: Fab City, Hyderabad (SEZ) for Phase-I and new location for Phase-II

* KSK Energy Ventures: Rs 3,211 cr; Site: Rajiv Gandhi Nano Tech Park & Fab City, Maheshwaram Mandal near Hyderabad

* Signet Solar: Rs 9,672 crore; Site: Sriperembudur, Tamil Nadu

Seven proposals envisaging an investment of around Rs 65,000 crore ($16.25 billion) have been received till date in response to the special incentive package scheme for semiconductor fabrication and other micro- and nano-technology manufacturing industries announced by the government last year.

The proposals range from manufacture of wide variety of items like polysilicon, single/multi-crystalline ingots, wafers, solar cells, solar photovoltaic modules (SPV) liquid crystal display (LCD), integrated circuits-advanced logic/memory/embedded system on chip including assembly, test, mark and packaging (ATMP) facility for semiconductor devices.

Ranbaxy to sell bio-generic osteoporosis drug

Ranbaxy Laboratories today announced the launch of Bonista - teriparatide injection (recombinant human parathyroid hormone) - for the treatment of osteoporosisin in association with Virchow Biotech, Hyderabad,

Ranbaxy is the first company to launch this bio-generic product in the world.

"Ranbaxy has a number of new products in its pipeline including Bonista for Osteoporosis patients who are normally treated by orthopaedics and gynaecologists. Bonista is also a classic example of our endeavour to offer quality bio-generic options to doctors and an affordable and efficacious product to patients," said Sanjeev I Dani, senior vice president & regional director (Asia & CIS), Ranbaxy.

Gammon Infra listed at Rs 170

Gammon Infrastructure Projects, a unit of construction firm Gammon India, was listed on the National Stock Exchange at Rs 170 per share - just 1% higher than the issue price.

The scrip touched an intra-day high of Rs 185 and was trading at Rs 163.40 at 1.25 p.m. A total of 60 lakh shares were traded on the NSE.

Dr Reddy's Labs buys Italy-based Jet Generici

Dr Reddy's Laboratories has acquired Jet Generici Sri, a company engaged in sales of generic finished dosages in Italy.

The deal has been completed via Dr Reddy's Italian subsidiary,Reddy Pharma Italia SpA, which has been engaged in buliding a pipeline of registrations since its incorporation. Financial terms and other conditions of the transaction were not disclosed.

V S Vasudevan, president & head (Europe operations), Dr. Reddy's, said: "Dr Reddy's has taken a significant step forward by establishing its business in the third largest pharmaceutical market in Europe. The acquisition has been well timed since Dr Reddy's will be able to immediately supplement the Jet Generici portfolio via its own pipeline. We already have registration for one significant Dr Reddy's product, and a strong pipeline of registration applications. We believe that this strategic investment will generate substantial opportunities for long-term value creation in one of the fastest growing generic markets of the world."